By Chuck Overeem
Equipment disposition is the process by which equipment is removed from use and physically removed from a hospital or clinic. There are several reasons to remove equipment. It may be underutilized, obsolete and out of support. There may be newer technology that fits your needs or customer base. In either case, it has to go. Properly disposing of this equipment can help defray the cost of new equipment or simply help recover lost space to provide services. Always assume that an item has value until you prove that it doesn’t.
There are several ways to dispose of equipment. Each has its own merit.
- Dispose of in a dumpster. Old, broken, unrepairable, obsolete technologies with no reusable parts belong in a dumpster.
- Redeploy in another area or location. One department’s surplus could be another department’s salvation. This can help to avoid using contingency funds to replace or add needed equipment for cash-strapped departments. You will typically get less selling an item than what you will avoid spending to buy a new piece of equipment. The cost avoidance is the bigger benefit.
- Trade in. This helps defray the cost of new equipment. When buying new equipment this is one of the easiest ways to dispose of old equipment. It is not always the most cost effective.
- Auction or sell. The HTM department can sell it outright to the aftermarket or utilize one of several “Disposition Companies” who will sell or auction off the equipment and take a part of the proceeds for their services. Selling an item will usually garner a larger sum than a trade-in. Selling it yourself garners higher rewards. Using a disposition company will clear up space faster, but likely realize less cash in the coffers. With that said, with their vast network of customers, a disposition company could occasionally get you a higher price than selling an item yourself and may succeed in selling items that you have not been able to.
- Donate. Donations are needed by organizations that serve the poor and underserved populations around the world including in the U.S. Benefits of this method include tax write offs, community goodwill and the good feeling that comes from helping others.
The disposition option that is chosen could mean thousands or hundreds of thousands of dollars in revenue or cost avoidance to a hospital in the course of a year.
No matter what disposition option you choose, several steps should be followed.
- Make sure that the item cannot be used in another department.
- Be sure to remove all patient information from the device.
- Remove all hospital labels and identification.
- Remove the device from inventory and document its removal along with the cost avoidance or sale amount to quantify the value of your efforts and to avoid the cost of wasted time searching for equipment that no longer exists.
- Notify finance/accounting so it can be properly written off.
As stated earlier, properly disposing of equipment has several benefits for any organization.
Retiring and disposing of old equipment that is costly to maintain saves time and money on repairs as well as aggravation for the hospital staff and patients.
Disposition of equipment opens valuable hospital real estate and allows you to expand existing programs or even open new ones without a costly building project.
Disposition of equipment allows for the purchase of newer equipment.
Proper disposition reclaims the value left in equipment that you no longer use.
If you do not have a disposition program, start one by assigning someone or hiring someone to lead the charge and be the point person for all departments. From this point forward, before any equipment is disposed of, this person needs to be made aware so he/she can determine how to proceed. This person will decide if the item can be redeployed, sold or scrapped. Before new equipment is purchased and old equipment is traded-in, this person should try to sell the old equipment. If they can beat the trade-in then sell it, if not take the trade. This point person can do the required documentation to properly retire the equipment. After the program is established, it could even be expanded to other hospital equipment, including environmental services equipment and food services equipment. All of this equipment, just like medical equipment, gets old, needs to be replaced and still has some value. Our hospital has sold ice cream and gelato machines as well as floor scrubbers and sweepers.
A properly run disposition program regains value from unused and underutilized assets helping to defray the cost of new equipment. It helps regain valuable hospital real-estate so that it can be used for more productive purposes than storage. It helps keep your equipment inventory current. It allows the hospital to actively redeploy equipment and avoid the cost of purchasing duplicate equipment. It can even garner good will in the community and allow you to help the underserved in the community by donating your used equipment.
Chuck Overeem is a Biomedical Equipment Lifecycle Planner for ProHealth Care.
